Tax Type
Estate Tax
Description
Estimated Tax Payments
Topic
Computation of Tax
Date Issued
07-16-1999
July 16, 1999
Re: Request for Ruling: Taxation of Trusts and Estates
Dear***
This will reply to your letter requesting a ruling regarding the proper annualization periods to be used to calculate estimated tax payments for trusts and estates.
Your request cited the differences between the federal and Virginia methods for calculating estimated tax payments for trusts and estates. Specifically, the annualization periods for federal purposes differ from the annualization periods for Virginia purposes. The annualization periods for federal purposes are defined in Internal Revenue Code (``IRC') Sec.6654. The annualization periods for Virginia purposes are defined in Code of Virginia Sec. 58.1-492 and Sec.10-112-443 of Title 23 of the Virginia Administrative Code.
For federal purposes, the annualization periods for a trust with a calendar year basis are January 1 through February 28, January 1 through April 30, January 1 through July 31, and January 1 through November 30. Virginia defines the annualization periods for computing estimated tax payments differently. The annualization periods for Virginia purposes are January 1 through April 30, January 1 through May 31, and January 1 through August 31. The reason the periods differ is because the IRC allows an exception for trusts and estates. This exception ends each annualization period one month before the end of the period for individuals. Virginia does not provide for a similar exception.
Virginia is a conformity state only with respect to the terminology used in the IRC. The administration of federal tax law and Virginia tax law differ in many respects. This is just one instance where the administration of federal and state tax laws do not conform to one another. An act of the Virginia General Assembly which amends the relevant sections of the Code of Virginia would be necessary to make Virginia's annualization periods conform to the federal periods. The Code of Virginia does not grant the Tax Commissioner the authority to make such a change. Until a change is made in the law, the annualization periods will remain the same.
I hope this answers your question. If you have any more questions, please feel free to contact ***** in the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/23386G
Re: Request for Ruling: Taxation of Trusts and Estates
Dear***
This will reply to your letter requesting a ruling regarding the proper annualization periods to be used to calculate estimated tax payments for trusts and estates.
Your request cited the differences between the federal and Virginia methods for calculating estimated tax payments for trusts and estates. Specifically, the annualization periods for federal purposes differ from the annualization periods for Virginia purposes. The annualization periods for federal purposes are defined in Internal Revenue Code (``IRC') Sec.6654. The annualization periods for Virginia purposes are defined in Code of Virginia Sec. 58.1-492 and Sec.10-112-443 of Title 23 of the Virginia Administrative Code.
For federal purposes, the annualization periods for a trust with a calendar year basis are January 1 through February 28, January 1 through April 30, January 1 through July 31, and January 1 through November 30. Virginia defines the annualization periods for computing estimated tax payments differently. The annualization periods for Virginia purposes are January 1 through April 30, January 1 through May 31, and January 1 through August 31. The reason the periods differ is because the IRC allows an exception for trusts and estates. This exception ends each annualization period one month before the end of the period for individuals. Virginia does not provide for a similar exception.
Virginia is a conformity state only with respect to the terminology used in the IRC. The administration of federal tax law and Virginia tax law differ in many respects. This is just one instance where the administration of federal and state tax laws do not conform to one another. An act of the Virginia General Assembly which amends the relevant sections of the Code of Virginia would be necessary to make Virginia's annualization periods conform to the federal periods. The Code of Virginia does not grant the Tax Commissioner the authority to make such a change. Until a change is made in the law, the annualization periods will remain the same.
I hope this answers your question. If you have any more questions, please feel free to contact ***** in the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/23386G
Rulings of the Tax Commissioner